Stocks up after election; businesses take a ‘wait-and-see’ outlook

By Alexander Soule

Updated
3:13 pm EST, Wednesday, November 9, 2016

Photo: J. SCOTT APPLEWHITE / AP

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Shares of Lockheed Martin jumped 7 percent after the opening bell on Wednesday, Nov. 10, 2016, after Donald Trump’s presidential election victory Tuesday night. Lockheed Martin owns Sikorsky Aircraft, which builds Black Hawks and variants for the U.S. military, as well as the Marine One White House fleet. (AP Photo/J. Scott Applewhite) less

Stocks of major Connecticut employers were trending upward Wednesday a day after Donald Trump shocked America and the world in winning the White House.

After international markets were roiled overnight, U.S. investors appeared to take the news of a Trump administration in stride, with the Dow Jones Industrial Average, S&P 500 and Nasdaq all down less than 1 percent Wednesday morning after the opening bell and rising into positive territory by noon.

“I think it’s wait and see — it’s really important that we see who is advisers are,” said Joe McGee, vice president of public policy for the Stamford-based Business Council of Fairfield County, which has many of the region’s largest corporations in its membership base. “The thing about the Trump campaign was that it (addressed) big themes … Clearly they resonated — but that has to be translated into proposals.”

Health care, international trade, immigration, even the carried-interest rules hedge funds have enjoyed — all are now on the table, creating uncertainty for corporations down to small businesses. Some are clearly expecting better times ahead: shares of Sikorsky Aircraft parent Lockheed Martin (NYSE: LMT) jumped 7 percent after the bell to top $256, with Sikorsky the largest private-sector employer in southwestern Connecticut with nearly 8,000 people at its Stratford helicopter plant and surrounding facilities.

Queried by Hearst Connecticut Media on Wednesday morning on Lockheed Martin’s outlook under a Trump administration, a company spokesman emailed a statement that Lockheed Martin looks forward “to working with his administration and the new Congress to support and strengthen our national defense.”

Financial companies saw gains Wednesday, including Bridgeport-based People’s United Financial (Nasdaq: PBCT), the largest retail bank in southwestern Connecticut with more a quarter of local deposits. Among national banks with large local branch networks, shares of both JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) were up 3 percent to about $72 and $47 respectively, with Bank of America (NYSE: BAC) up 4 percent to $17.60. And Synchrony Bank (NYSE: SYF) was up 3 percent as well to $29.45, with the Stamford-based company managing retail credit card programs and holding deposits via the online Synchrony Bank.

“Whether it’s the consumer perspective or the investor perspective ... I think we have prospects here for policies that could be stimulative to the economy, and it’s the anticipation of that impacting the markets,” said Albert Brenner, director of asset allocation strategy at People’s United Wealth Management in Bridgeport. “On the other hand, those policies are not formulated yet and then you’ve got the potential uncertainty of the man himself. I don’t think I am going out on a limb to say that he has the opportunity to grow into the role. ... From our perspective, we think the economy has considerable momentum behind it.”

After stumbling in early trading Wednesday, Connecticut’s largest corporate employer United Technologies (NYSE: UTX) saw its own shares gain 2 percent by the afternoon. Farmington-based UTC sold Sikorsky last year to Lockheed Martin, but maintains a major presence in its home state via aircraft engine manufacturer Pratt & Whitney and UTC Aerospace Systems, which have a mix of military and civilian business; as well as Otis and UTC Climate, Controls & Security, both major exporters in their own right focused on commercial buildings.

“In the run up to (the election), some of the comments I heard from our members were about certain things (Trump) talked about particularly in the area of trade, because Connecticut fares well on that front,” said Joe Brennan, CEO of the Connecticut Business & Industry Association. “There was also talk about immigration, because Connecticut has struggled to grow its population. ... (Immigrants) are filling jobs maybe others in Connecticut haven’t wanted to fill, so they have certainly been an important part of our economy.”

Domestic investment drives the economy, however, and some remain hopeful that Trump will look to enact policies that embolden companies to expand in the United States. Corporate investment is perhaps the biggest bellwether tracked by Joe Matthews, first vice president and financial adviser in the Fairfield office of Morgan Stanley.

“One of the things I’ve (watched) for a long time is the level of investor optimism,” Matthews said. “What we have experienced for a long time is investor pessimism, and that’s had a major impact on capital expenditures as corporations ... have tried to squeeze more from old machines and buildings.”